Influence of IT on Manufacturing Productivity
Updated: Sep 6, 2022
The effectiveness of production is measured by productivity. The industry should concentrate on creating the correct product, with exceptional quality and sufficient quantity, at the right price and at the right time, in order to retain productivity. Only when there is no lag between the flow of materials and the flow of information can manufacturing expenses be reduced and managed. All manufacturing businesses must have an information system. Let's examine how IT might affect manufacturing industry productivity.
What is Manufacturing ERP (Enterprise Resource Planning)?
Manufacturing ERP refers to Enterprise Resource Planning (ERP) software and systems used to plan, manage and deliver specific functionalities that support manufacturers and manufacturing business operations. Modern manufacturing ERP systems are built to support and integrate into any business process flexibly, creating a complete business management platform for manufacturing companies.
Why is ERP Software Used in Manufacturing?
ERP systems are manufacturing management software that increases the organizational efficiency of a manufacturing enterprise by managing and improving how company resources are utilized. Enhancing and/or reducing the number of resources necessary without sacrificing quality and performance are keys to effectively improving manufacturing business growth and profitability. With ERP software, manufacturing companies have the ability to manage critical aspects of everything from shop floor operations to supply and inventory planning.
Benefits of ERP for Manufacturing Companies
Having a contemporary, integrated manufacturing ERP system has numerous positive macro and micro operational and financial effects. The following are some of the most noteworthy advantages of ERP for manufacturers:
Automates and Streamlines Business Processes with greater Adaptability
A complete ERP solution streamlines business processes and drives automation for manufacturing organizations. By streamlining the processes, all data is available in a centralized location with complete visibility in all functionalities – development, designing, inventory, procurement, production, finance, sales, delivery, and more.
Furthermore, any person can monitor the production status in real-time, without any dependence on an individual or team. For instance, the designing team can monitor the progress of production and update the purchasing and finance departments about the requirements of additional raw materials.
This brings efficiency to the system, improves productivity, and helps companies maintain their customer commitments. By automating the processes with ERP for the manufacturing industry, the company also reduces its dependence on manual processes. This not only accelerates the production process but minimizes errors and improves profitability significantly.
ERP-solution Respond to Market Conditions Quicker
ERP for the manufacturing industry provides real-time data analysis that helps businesses estimate, plan, adjust and respond to changing market requirements better. Decision makers refer to system-generated reports at regular intervals to understand the varied market demands and capitalize on customers purchasing trends. Detailed insights give managers a 360-degree view helping them to reduce forecasting errors and capitalize on new opportunities if available.
Strategic Decision Making
A comprehensive ERP solution for manufacturing improves the decision-making ability of an organization. It provides thorough insights and visibility into every department and business process helping the company to make informed, spot-on, and faster business decisions. Access to key performance metrics such as overall sales, sales margin, etc. helps manufacturing companies remain aligned to their goals and take necessary internal decisions if the need be. The complete visibility of internal processes and departments with ERP for the manufacturing industry also helps the management to optimize the day-to-day operations.
A robust ERP software helps manufacturing organizations to reduce the overall operational cost as manual, time–consuming processes are replaced by automated, streamlined processes with real-time business information. Additionally, by increasing worker productivity, the ERP for the manufacturing industry minimizes labor expenses, and enhanced precision and lower error rates curtail the losses. The ability to track inventory accurately and integrate it efficiently with production planning eliminates excess inventory and warehousing costs. And lastly, improved organizational visibility helps the management make savings wherever possible.
Enhance Customer Satisfaction
Accurate production planning enhanced control over inventory, streamlined process scheduling, and coordination of distribution channels enable manufacturers to improve on-time delivery of products, a critical performance metric. Delivering products on time is critical to maintaining customer satisfaction. ERP solutions for manufacturing organizations offer data in real-time so decision makers can get a realistic view of inventory levels at any time.
We at AlphaBI Consultancy approach ERP with a well-defined custom solution, we understand the requirements of a business, their workflow, and system so that the planning is precise and well organized. If you think your business is in need of an ERP solution we’re just a mail away.